Beyond Acronyms and Algorithms…Defining Value in the Marketplace

The IAB Advertising Technology Marketplace themed “Beyond Acronyms and Algorithms…Defining Value in the Marketplace” kicked off on a day of record summertime heat in the heart of New York City. Patrick Dolan, Executive Vice President and COO of the Interactive Advertising Bureau, welcomed the room full of ambitious and forward-thinking industry influencers. “It’s time to stop bemoaning complexity—and focus, as an industry, on how advertising technology can improve business models for publishers and advertisers,” he said rallying the crowd. “Each and every one of the sessions you see here today will focus on finding and defining value.” Before jumping into the first presentation, Dolan proudly announced the Co-Chairs of the IAB Advertising Technology Council: Jonathan Bellack, Product Management Director, Publisher Ad Platforms, Google, and Jay Sears, Senior Vice President, Demand, Rubicon Project.

The initial session opened with both a tough and inspiring question from Doug Weaver, Founder, Chief Executive Officer, Upstream Group. In a perfect world what would the advertising technology ecosystem look like? “It should not feel like the back of my entertainment center…It should look more like an organizing network where acting on your choices would be simple and clear.” Dave Jacobs, Senior Vice President, Publisher Services, Advertising.com, answered this question by describing an evolution beyond a congested highway of “taxes and tolls” to an environment where the path to value is more simple and clear, where there’s a balance between value and dollar distribution. Jay Sears, Senior Vice President, Demand, Rubicon Project, emphasized focusing not on cost reduction, but media investment and, again, value creation. “Complexity is the enemy,” he said. “The end customer doesn’t want to hear about your plumbing. They want to hear about you solving their problems,” he said.

“We don’t care about clicks,” proclaimed Bob Arnold, Associate Director, Global Digital Strategy, Kellogg Company, to a crescendo of applause. “We are a branding company,” he said. “We’ve done enough studies to show clicks have little correlation with sales and brand lifts.” He said this on stage with Chip Scovic, Head, Sales, Google, to describe the benefits he’s experienced using programmatic buying with DoubleClick as a partner—a 5 to 6 fold increase in ROI. It’s not just about efficiency, but also effectiveness, the duo said. To achieve this type of success, Scovic said, it takes strategy and thought, the right recipe of ingredients such as powerful creative, targeting to the right audience at the right time, carefully selected KPIs, as well as talented teams, strong partnerships, and a structured approach for iterative improvements.

A live-feed report from the World Wide Web Consortium(W3C) Tracking Protection Working Group: Do Not Track by Chris Mejia, Director, Digital Supply Chain Solutions, IAB, and Mike Zaneis, Senior Vice President, Public Policy, and General Counsel, IAB, followed intimate, fast-paced marketplace sessions from solutions providers and a networking refreshment break. In person, on the stage, Michael Wechsler, Founder, TheLaw.com;Stuart Ingis, Partner, Venable; Grace Liau, Senior Vice President, Partnerships, VivaKi Nerve Center; and Steve Sullivan, Vice President of Advertising Technology, IAB, joined Mejia and Zaneis to lead a town hall discussion on the critical matter. At risk, as members of the group explained, is the viability of small publishers, the quality of the consumer experience online, and the value exchange between publisher, advertiser, and consumer that propels the interactive advertising industry. Ingis emphasized the broad consensus and support behind the standard of self- regulation championed by the Digital Advertising Alliance. The W3C process, he said, could be just a “side show.” Wechsler likened the opt-in Do Not Track option to the nuclear bomb solution from the science fiction film Dr. Strangelove.

Candid conversation continued as case studies illuminating how agencies and publishers are benefitting from the advertising technology landscape took center stage. Joe Zawadzki, Chief Executive Officer, MediaMath, led Adam Cahill, Executive Vice President, Co-Media Director, Hill Holliday, through a revealing discussion about the agency point of view. “Our idea is not to use these tools to get low-cost inventory. We want to use these tools so we can be smarter. We want publishers to do really well,” Cahill said. In one case, Hill Holliday dipped its toe into a campaign by running survey ads asking if recipients were interested in receiving ads from the client, in this case a quick-serve restaurant. The team then targeted the receptive audience at scale. The campaign performed twice as well as those that weren’t similarly targeted, he said, based on a KPI of purchase intent.

The publisher point of view came to light next as Eric Franchi, Co-Founder, Undertone, led a discussion with Steven Goldberg, Vice President and General Manager, Advertising Sales and Strategy, HomeAway. Goldberg opened the curtain on how the company has built a balanced and sound revenue model through a combination of users who pay to use the site’s services, direct ad sales, and non-direct ad sales through real-time bidding and more “traditional” partners like ad networks. While 50 percent of the advertising revenue comes from direct sales efforts, it stems from just 20 percent of the daily volume of impressions, he said. The other 50 percent of the advertising revenue comes from non-direct ad sales with RTB responsible for 35 percent and “traditional” partners bringing in 65 percent of the pie. One key to success is managing the RTB business so it doesn’t compromise the interests of paying users or direct sales operations.

The first order of the afternoon after the networking lunch: breaking news. Innovative attribution models are shifting how media is bought and sold, revealed a new study from the IAB, conducted by Forrester Consulting, entitled “Digital Attribution Comes Of Age.” Patrick Dolan, Executive Vice President and COO of the Interactive Advertising Bureau, announced the release of this report while Ari Osur, Principal Analyst, Interactive Marketing, Forrester, debuted the findings in addition to those from a related Forrester survey. Some highlights: As media buyers are become confident in their attribution models, they will more frequently demand that publishers sign on to this compensation structure—or find themselves on the outside of media deals. From the related survey, 44 percent of marketers aren’t using attribution, while 34 percent are using more sophisticated models such as rules-based and algorithmic, and just 30 percent using first or last click.

An inside look at programmatic buying of mobile and video inventory captured the attention of attendees next. Lara Mehanna, General Manager, Mobile, DataXu, generated excitement and urgency around the on-the-go platform. “If you haven’t thought about mobile and a mobile strategy you’re already losing the game,” she said as she presented stunning statistics such as the mismatch of consumer time spent with mobile compared to its minimal ad spend. The advantage of RTB in mobile is the ability to finely target audiences, particularly in a space where there are so many parameters such as device that aren’t applicable to PCs, she said. Teg Grenager, Founder, Vice President, Product, Adap.tv, delved into programmatic buying for video. As audiences have eroded from television, they’re moving toward mobile, online video, and social networks. “Programmatic buying is powerful for these advertisers, because it’s a way that they can find their audiences efficiently at scale across channels and devices. Brands are starting to become convinced of this as well,” he said. Publishers are also increasing moving toward the programmatic buying of video, since more bidders can mean higher CPMs.

Following an ice cream break, attendees participated in intimate “Marketplace Conversations,” breakout sessions meant to harness the same energy present in the hallways and over drinks at conferences. At the end of the day, participants would provide summaries of the conversations to the larger group as part of a Town Hall Debate.

But first, the audience was privy to another update from the W3C Tracking Protection Working Group: Do Not Track. The top-of-mind issue: the W3C group, made up primarily of large data owners like browsers, as well as privacy advocates and academics, classified advertisers and agencies as third-party data collectors, threatening their access to information that not only supports the existing industry business model but also their ability to produce quality personalized experiences for consumers. “Some of these proposals are ripping out the engine of the interactive advertising ecosystems,” said Eric Wheeler, Chief Executive Officer and Co-Founder, 33Across. The update ended with attendees eager to get involved.

OpenRTB, Private Marketplaces, and Viewability were the topics that brought together the minds and voices of attendees during the “Marketplace Conversations.” Volunteers from the OpenRTB session reported back that the crowd largely discussed brand safety, both for advertisers and publishers. The atmosphere of the Private Marketplaces conversations demonstrated the genuine interest of attendees and its nascent state. Talk revolved around asking and answering basic questions such as: What are private marketplaces? Is there demand? Why should I participate? Last on the docket was Viewability. Volunteers said the attendees dug into the details—How can the ecosystem drive consistency in viewable impressions to minimize discrepancies? How will it affect user experience? How are large format ads like Rising Stars accommodated? All is need-to-know information for executives on the front edge of interactive advertising.

The day concluded with attendees eager to share their newfound insights and ideas at the bar. The premier IAB Advertising Technology Marketplace, the evolution of the IAB Networks & Exchanges Marketplaces, ended with a “cheers.”